Santo, Inc. acquired 30% of Nino Corp.'s voting stock on January 1, 2019 for P360,000. During 2019, Nino earned P150,000 and paid dividends of P90,000. Santo's 30% interest in Nino gives Santo the ability to exercise significant influence over Nino's operating and financial policies. During 2020, Nino earned P180,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000. Thereafter, Santo, Inc. designated the investment as FVTOCI. The remaining shares of Nino Corp. held by Santo, Inc. have a fair value of P220,000 at December 31, 2020. How much is the total amount to be recognized in Santo, Inc.'s 2020 profit or loss related to this investment? P114,000 P123,000 P87,000 P158,500 The Gain on remeasurement of the retained investment is Nil P48,000 P43,500 P57,000
Santo, Inc. acquired 30% of Nino Corp.'s voting stock on January 1, 2019 for P360,000. During 2019, Nino earned P150,000 and paid dividends of P90,000. Santo's 30% interest in Nino gives Santo the ability to exercise significant influence over Nino's operating and financial policies. During 2020, Nino earned P180,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000. Thereafter, Santo, Inc. designated the investment as FVTOCI. The remaining shares of Nino Corp. held by Santo, Inc. have a fair value of P220,000 at December 31, 2020. How much is the total amount to be recognized in Santo, Inc.'s 2020 profit or loss related to this investment? P114,000 P123,000 P87,000 P158,500 The Gain on remeasurement of the retained investment is Nil P48,000 P43,500 P57,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 26E
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Transcribed Image Text:Santo, Inc. acquired 30% of Nino Corp.'s voting stock on January 1, 2019 for P360,000. During
2019, Nino earned P150,000 and paid dividends of P90,000. Santo's 30% interest in Nino
gives Santo the ability to exercise significant influence over Nino's operating and financial
policies. During 2020, Nino earned P180,000 and paid dividends of P60,000 on April 1 and
P60,000 on October 1.
On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000. Thereafter,
Santo, Inc. designated the investment as FVTOCI. The remaining shares of Nino Corp. held by
Santo, Inc. have a fair value of P220,000 at December 31, 2020.
How much is the total amount to be recognized in Santo, Inc.'s 2020 profit or loss related to
this investment?
P114,000
P123,000
P87,000
P158,500
The Gain on remeasurement of the retained investment is
Nil
P48,000
P43,500
P57,000
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